Chamber Fatigue? Area businesses face increasing options
Jan 27, 2013 (The Capital - McClatchy-Tribune Information Services via COMTEX) --
Jason Smith explains his job in less than two minutes during monthly breakfast meetings.
He pitches South River Restoration and its services to other Annapolis and Anne Arundel County Chamber of Commerce members. The disaster recovery company uses its chamber membership to stay connected with local businesses and expand its client base.
The economy has forced many companies to scale back on paid networking services, but some still seek to build their business through chamber connections.
"From my view, sales is still seeing somebody," said Smith, the company's vice president of sales. "Social media is great (but) a lot of people can feel that mass mailing is not warm.
"When you get to stand across from somebody and understand what their pains are, and potentially be able to help them, that's where you connect. And that's a big win for us."
Anne Arundel County is bursting with nonprofit business organizations serving a regional or niche focus. The Northern Anne Arundel, Southern, and West County chambers reach geographic regions. There also are groups geared toward specific communities and interests, like the Greater Severna Park and Greater Crofton chambers, Pasadena Business Association and the Black Chamber of Commerce.
Traditionally, chambers of commerce have lobbied lawmakers, recruited businesses and provided networking for business owners.
But in an era where networking is as easy as signing up for a LinkedIn profile or a Facebook page, it begs the question if there is a need for so many chambers of commerce. Memberships can range from $20 to $500 a month, depending on the firm's size.
Many small businesses have to decide which group best fits their needs because they can't afford to pay for duplicate services. Local chamber leaders don't view themselves as competitors for members, but the recent economic downturn revealed the value of maintaining memberships.
Some local chambers saw their fiscal health decline during the so-called Great Recession. The Annapolis and Anne Arundel chamber's decreasing membership base resulted in a net loss of $18,544 in 2010, according to IRS financial filings. Its membership dues revenue fell to $273,259 in 2010 from $308,270 in 2009.
The Queen Anne's County chamber had a net loss of $949 in 2010 and that grew to a $2,111 shortfall in 2011, the most recent financial data shows.
The Pasadena Business Association reported a $1,796 deficit in 2011. Meanwhile, chambers in Severna Park ($13,578) and Northern Anne Arundel ($66,011) ended 2010 with cash surpluses.
Choosing how best to spend money and time can be a daunting task for entrepreneurs who are bombarded by trade associations, online and face-to-face Meetup programs and free networking groups.
"In Howard County, there's one (chamber of commerce); it's a much stronger entity," Exclamation Communications Inc. President Jeff Cochran said. Cochran's marketing firm created the free networking group LinkAnnapolis, which has about 800 members.
"In Anne Arundel, all these different groups have done themselves a disservice in a sense that it's 'divide and conquer' as opposed to 'let's come together and be a voice for the county,' " Cochran said. "That's part of what's attractive about LinkAnnapolis. Don't worry about politics. Come and network, enjoy one another and build relationships."
But Anne Arundel chamber heads disagree. These chambers meet quarterly to discuss possible collaborations and there are frequent inter-chamber mixers.
"We don't see ourselves as competing with the other chambers of commerce. We think the other chambers serve a valuable role," said Bob Burdon, CEO of the Annapolis and Anne Arundel chamber. "When you walk into any business and talk about chamber membership, it's a balance just like any other product or service. Some are going to need it at that point, and some are going to need it down the road."
The 2008 recession took a financial toll on Burdon's group. In 2009, the organization ended the year with a loss of $21,163.
Burdon attributed the problem to a loss in memberships. Businesses barely staying afloat could not justify spending money on non-essential items.
But things have improved and Burdon reports a 7 percent increase in revenue and a 14 percent increase in program and event income.
"We were subjected to the challenges that the recession presented to most businesses," Burdon said. "A lot of these small businesses had to pay rent and had to make their payrolls. Chamber of commerce dues were a little farther down on a list of priorities during that period of time."
Annapolis-based Fisher Law firm was among the chamber's losses. Attorney Randy Fisher was a member for five years. All the while, others were telling him to join the West County chamber.
Fisher attended a West County meeting and gained three clients. So in 2010, he dropped his Annapolis membership and joined West County. His current chamber is in a bustling area that includes Fort George G. Meade, Gambrills, Hanover and Odenton.
West County's coffers have risen with the region's recent growth. It closed 2009 with a net loss of $5,543 with $64,964 in membership dues, according to IRS filings. In 2010, its membership dues totaled $74,333 and it posted net income of $8,030. The chamber's net income was $1,653 in 2011 and revenue from membership inched up to $74,961.
"Annapolis was too big to have the kind of programs that allowed me to meet the kind of customers I wanted to meet on a regular basis," Fisher said. "West county is a ... high growth area. It's a place where I thought it would be good to get exposure for my business."
This year, the Greater Severna Park chamber launched its Shop Local program. Names are tossed in a hat and each quarter, someone wins a $500 shopping spree at 45 participating member businesses.
It is one of the new services the organization offers its 600 members. Executive Director Linda Zahn admitted it has been a challenge attracting new members.
Social media, other chambers and technology add another layer to the competitiveness. And there is no geographic requirement for the chambers, so businesses based in other counties can join Anne Arundel chambers.
"The more organizations you get involved in, the more networking you do, the more access you would have to other people," Zahn said.
Pam Gockley, CEO of Leesburg, Pa.-based Gockley Associates, found larger chambers had mixers geared toward bigger businesses. She is a member of the Northeast Berks Chamber of Commerce, which focuses on small businesses.
"The bigger chambers usually offer the bigger sponsors and the bigger companies, their employees are not going to use my products and services," Gockley said. "At the smaller chambers, you're talking to the business owner. With the bigger chambers, they'll never come. The higher-ups will never attend that event."
'You get what you pay for'
West County's chamber membership has increased 60 percent in the past five years, CEO Claire Louder said. She attributed the spike to growth in the region and offerings such as mentoring services and helping forge business partnerships.
"You get what you pay for," Louder said. "The cost of a chamber membership is less than a month's advertisement in a publication and yet you get so much more than the listing in the directory. You get an opportunity to connect with other people, an opportunity to influence decisions that are made legislatively, and you get to connect with the community in a way you may not know about."
But it would take more convincing to get Letetia Evans to join. Evans has been in business less than a year and has found success using free networking groups. The independent representative of direct selling company 5Linx Enterprises Inc. connects people to services that can get them lower phone and electricity rates.
She promotes her business through LinkAnnapolis, a Bowie Meetup group geared toward start-ups, and Networking Your Biz, which has a series of programs around the state. Eventually, she wants to join paid groups.
"Right now, I'm having just as much success with the nonpaid (groups)," said Evans, who left a recent LinkAnnapolis event with 10 new contacts. "You have to weigh (return on investment) when you're looking for ideas and things that can change your business."
Two years ago, Exclamation Communications Inc. created LinkAnnapolis, and later, LinkColumbia, to create relationships among businesses. There are no membership dues, and each entity has a monthly happy hour where business cards are exchanged.
Members also can look one another up on LinkedIn. An average of about 100 participants attend the monthly events.
"We have some socially mature folks come to our events, a lot more senior-level business owners or managers, and they are there to network and connect," said Cochran, head of Exclamation. "A lot of other networking groups that I've had some exposure to are made up of what I call 'serial networkers.'
"It seems like they are there to get leads. There's the difference. We're there for a relationship."
LinkAnnapolis member Jon Haas networks in 15 groups per month. The business development representative for the Stevensville franchise of Rainbow International is a member of the Queen Anne's County chamber.
"Each (group) creates its own synergy, and in the long run I think they help build each other up," Haas said. "There's a lot of legislative focus (with the chamber of commerce), as well as looking for new businesses and trying to attract new businesses to the area. Some of the networking groups tend to be more like, 'We're here, and now that we know that we're here, what can we do for each other ' "
And there are also ways to evaluate chambers. John McAdam, CEO of Lambertville, N.J.-based Pioneer Ventures, said successful chambers attract outside capital investment to their regions and boost quality of life in their communities. But there are limits to what business owners can do when there are multiple chambers. "Sometimes they are over-chambered," said McAdam, whose upcoming book advises entrepreneurs on creating business plans. "If there's too much overlap, they're stepping on each others' feet. There's a numbness to the amount of events that a small business owner can possibly go to. When you're getting events from six different chambers, it dilutes it for everybody."
The Howard County Chamber of Commerce is the only chamber in the county. It has about 700 members. It has a lobbyist focusing on local issues. That service was critical in 2008 when it and other business groups successfully fought the 6 percent "tech tax" on computer services.
Still, officials there see competition for its membership. It is being proactive and plans to hire someone to show small businesses how to land federal contracts.
"This is not your grandfather's chamber anymore. We all need to be very nimble and stay very current with what's happening," Howard County chamber CEO Pam Klahr said. "The most important thing a chamber has to keep in mind is that one size does not fit all. We have to make sure we have an idea of what a small business needs, but we can't turn our backs on the ones that are keeping the organization going, the 10 to 20 percent of our members that are paying the major load."
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